Etsy is running a randomized test that caps shipping charges on some qualifying US orders that use calculated shipping, with Etsy paying the difference so that sellers still receive their full rate. On a $10 calculated rate with a $7.99 cap, the buyer pays $7.99 and Etsy pays the remaining $2.01, which appears in Order Details as “Etsy-funded shipping.” Etsy hasn’t said whether $7.99 is the actual cap it’s testing or if it’s just a number for the example it provided in the announcement, or whether its fees on shipping revenue apply to the full rate or the lower amount buyers pay. Either way, Etsy won’t stop trying to subsidize shipping. At one point, the company covered shipping up to $20 as part of its Insider membership, but cut the perk to $6 about a year later after current CEO Kruti Patel Goyal, then its chief growth officer, said the original version “didn’t provide scalable economics.” They can’t seem to figure out that they’re not Amazon and don’t own a fulfillment network.
